Condensed Consolidating Financial Information | NOTE 12 — CONDENSED CONSOLIDATING FINANCIAL INFORMATION As of June 30, 2016, all of the Company’s principal debt arrangements were guaranteed by each of its material domestic subsidiaries, other than MGP, MGM Grand Detroit, LLC, MGM National Harbor, LLC, Blue Tarp reDevelopment, LLC (the company that will own and operate the Company’s proposed casino in Springfield, Massachusetts), and each of their respective subsidiaries. The Company’s international subsidiaries, including MGM China and its subsidiaries, are not guarantors of such indebtedness. Separate condensed financial statement information for the subsidiary guarantors and non-guarantors as of June 30, 2016 and December 31, 2015, and for the three and six months ended June 30, 2016 and 2015 are presented below. Within the Condensed Consolidating Statements of Cash Flows for the six months ended June 30, 2016 and 2015, the Company has presented net changes in intercompany accounts as investing activities if the applicable entities have a net asset in intercompany accounts and as a financing activity if the applicable entities have a net intercompany liability balance. Certain of the Company’s subsidiaries collectively own 73.3% of the Operating Partnership units as of June 30, 2016, and each subsidiary accounts for its respective investment under the equity method within the condensed consolidating financial information presented below. At these subsidiaries, such investment constitutes continuing involvement, and accordingly, the contribution and leaseback of the real estate assets do not qualify for sale-leaseback accounting. The real estate assets that were contributed to and owned by the Operating Partnership in connection with the IPO, along with the related transactions, have been reflected in the balance sheets of the MGM subsidiaries that contributed such assets. In addition, such subsidiaries recognized finance liabilities within “Other long-term obligations” related to rent payments due under the Master Lease and recognized the related interest expense component of such payments. These real estate assets are also reflected on the balance sheet of the MGP subsidiary that received such assets in connection with the contribution. The financial statement information presented below includes the accounting for such activity within the columns presented and in the elimination column. For all periods prior to the commencement of the Master Lease arrangement, the condensed consolidating information set forth herein has been retrospectively adjusted to conform prior periods to the current presentation, as the transactions occurred between entities, which are considered businesses, under common control. Accordingly, the real estate assets and associated operations in all periods prior to the IPO date were reclassified to conform to the current organizational structure, and are reflected in the MGP subsidiary that currently has legal title to such assets. CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION At June 30, 2016 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Current assets $ 1,145,471 $ 858,716 $ 343,221 $ 851,339 $ (4,960 ) $ 3,193,787 Property and equipment, net — 12,255,234 7,847,707 3,859,594 (7,859,679 ) 16,102,856 Investments in subsidiaries 17,240,279 2,946,796 — — (20,187,075 ) — Investments in MGP Operating Partnership — 2,127,790 — 503,817 (2,631,607 ) — Investments in and advances to unconsolidated affiliates — 1,332,977 — 6,186 25,000 1,364,163 Intercompany accounts — 4,261,100 — — (4,261,100 ) — Other non-current assets 52,963 442,857 10,079 5,382,770 (420 ) 5,888,249 $ 18,438,713 $ 24,225,470 $ 8,201,007 $ 10,603,706 $ (34,919,841 ) $ 26,549,055 Current liabilities $ 174,446 $ 1,036,301 $ 74,836 $ 744,816 $ (112,620 ) $ 1,917,779 Intercompany accounts 3,162,584 — 465 1,098,051 (4,261,100 ) — Deferred income taxes, net 2,281,315 — — 310,002 — 2,591,317 Long-term debt 7,262,737 2,836 3,134,791 1,964,556 — 12,364,920 Other long-term obligations 25,051 5,942,549 20,889 1,005,031 (6,851,614 ) 141,906 Total liabilities 12,906,133 6,981,686 3,230,981 5,122,456 (11,225,334 ) 17,015,922 Redeemable noncontrolling interest — — — 6,250 — 6,250 MGM Resorts International stockholders' equity 5,532,580 17,243,784 3,643,917 2,806,806 (23,694,507 ) 5,532,580 Noncontrolling interests — — 1,326,109 2,668,194 — 3,994,303 Total stockholders' equity 5,532,580 17,243,784 4,970,026 5,475,000 (23,694,507 ) 9,526,883 $ 18,438,713 $ 24,225,470 $ 8,201,007 $ 10,603,706 $ (34,919,841 ) $ 26,549,055 At December 31, 2015 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Current assets $ 561,310 $ 932,374 $ — $ 915,979 $ (914 ) $ 2,408,749 Property and equipment, net — 5,089,726 7,793,639 2,500,401 (11,971 ) 15,371,795 Investments in subsidiaries 18,491,578 2,956,404 — — (21,447,982 ) — Investments in and advances to unconsolidated affiliates — 1,460,084 — 6,413 25,000 1,491,497 Intercompany accounts — 3,234,271 — — (3,234,271 ) — Other non-current assets 38,577 444,333 — 5,460,227 — 5,943,137 $ 19,091,465 $ 14,117,192 $ 7,793,639 $ 8,883,020 $ (24,670,138 ) $ 25,215,178 Current liabilities $ 536,165 $ 994,570 $ — $ 708,130 $ (914 ) $ 2,237,951 Intercompany accounts 2,390,461 — — 843,810 (3,234,271 ) — Deferred income taxes, net 631,763 — 1,734,680 314,133 — 2,680,576 Long-term debt 10,393,197 4,837 — 1,970,277 — 12,368,311 Other long-term obligations 19,952 67,212 — 70,499 — 157,663 Total liabilities 13,971,538 1,066,619 1,734,680 3,906,849 (3,235,185 ) 17,444,501 Redeemable noncontrolling interests — — — 6,250 — 6,250 MGM Resorts International stockholders' equity 5,119,927 13,050,573 6,058,959 2,325,421 (21,434,953 ) 5,119,927 Noncontrolling interests — — — 2,644,500 — 2,644,500 Total stockholders' equity 5,119,927 13,050,573 6,058,959 4,969,921 (21,434,953 ) 7,764,427 $ 19,091,465 $ 14,117,192 $ 7,793,639 $ 8,883,020 $ (24,670,138 ) $ 25,215,178 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION Three Months Ended June 30, 2016 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Net revenues $ — $ 1,676,913 $ 110,903 $ 593,454 $ (111,768 ) $ 2,269,502 Equity in subsidiaries' earnings 693,687 35,663 — — (729,350 ) — Expenses Casino and hotel operations 1,941 940,373 — 371,520 (865 ) 1,312,969 General and administrative 1,588 258,392 13,864 47,563 — 321,407 Corporate expense 41,424 45,947 4,388 (306 ) (9,650) 81,803 Preopening and start-up expenses — 2,781 — 22,043 — 24,824 Property transactions, net — (427 ) 335 1,281 (335 ) 854 Depreciation and amortization — 132,627 53,123 62,075 (40,926 ) 206,899 44,953 1,379,693 71,710 504,176 (51,776 ) 1,948,756 Income (loss) from unconsolidated affiliates — 448,399 — (90 ) — 448,309 Operating income (loss) 648,734 781,282 39,193 89,188 (789,342 ) 769,055 Interest expense, net of amounts capitalized (147,728 ) (163 ) (29,475 ) (2,986 ) — (180,352 ) Other, net (34,592 ) (88,932 ) (72 ) (24,668 ) 82,539 (65,725 ) Income (loss) before income taxes 466,414 692,187 9,646 61,534 (706,803 ) 522,978 Benefit (provision) for income taxes 7,939 (17,196 ) — 777 — (8,480 ) Net income (loss) 474,353 674,991 9,646 62,311 (706,803 ) 514,498 Less: Net income attributable to noncontrolling interests — — (6,953 ) (33,192 ) — (40,145 ) Net income (loss) attributable to MGM Resorts International $ 474,353 $ 674,991 $ 2,693 $ 29,119 $ (706,803 ) $ 474,353 Net income (loss) $ 474,353 $ 674,991 $ 9,646 $ 62,311 $ (706,803 ) $ 514,498 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (813 ) (813 ) — (1,370 ) 1,626 (1,370 ) Other comprehensive income (loss) (813 ) (813 ) — (1,370 ) 1,626 (1,370 ) Comprehensive income (loss) 473,540 674,178 9,646 60,941 (705,177 ) 513,128 Less: Comprehensive income attributable to noncontrolling interests — — (6,953 ) (32,635 ) — (39,588 ) Comprehensive income (loss) attributable to MGM Resorts International $ 473,540 $ 674,178 $ 2,693 $ 28,306 $ (705,177 ) $ 473,540 Six Months Ended June 30, 2016 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Net revenues $ — $ 3,277,438 $ 110,903 $ 1,203,463 $ (112,616 ) $ 4,479,188 Equity in subsidiaries' earnings 979,880 76,974 — — (1,056,854 ) — Expenses Casino and hotel operations 4,063 1,844,433 — 767,899 (1,713 ) 2,614,682 General and administrative 3,201 496,536 29,484 100,729 — 629,950 Corporate expense 75,980 82,490 4,388 (157 ) (9,650) 153,051 Preopening and start-up expenses — 6,227 — 40,557 — 46,784 Property transactions, net — 3,840 1,209 1,271 (335 ) 5,985 Depreciation and amortization — 215,216 104,600 127,848 (40,926 ) 406,738 83,244 2,648,742 139,681 1,038,147 (52,624 ) 3,857,190 Income (loss) from unconsolidated affiliates — 463,189 — (178 ) — 463,011 Operating income (loss) 896,636 1,168,859 (28,778 ) 165,138 (1,116,846 ) 1,085,009 Interest expense, net of amounts capitalized (323,422 ) (358 ) (29,475 ) (11,766 ) — (365,021 ) Other, net (20,718 ) (108,468 ) (72 ) (37,783 ) 82,539 (84,502 ) Income (loss) before income taxes 552,496 1,060,033 (58,325 ) 115,589 (1,034,307 ) 635,486 Benefit (provision) for income taxes (11,344 ) (20,915 ) — 2,469 — (29,790 ) Net income (loss) 541,152 1,039,118 (58,325 ) 118,058 (1,034,307 ) 605,696 Less: Net income attributable to noncontrolling interests — — (6,953 ) (57,591 ) — (64,544 ) Net income (loss) attributable to MGM Resorts International $ 541,152 $ 1,039,118 $ (65,278 ) $ 60,467 $ (1,034,307 ) $ 541,152 Net income (loss) $ 541,152 $ 1,039,118 $ (58,325 ) $ 118,058 $ (1,034,307 ) $ 605,696 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (3,213 ) (3,213 ) — (6,135 ) 6,426 (6,135 ) Other comprehensive income (loss) (3,213 ) (3,213 ) — (6,135 ) 6,426 (6,135 ) Comprehensive income (loss) 537,939 1,035,905 (58,325 ) 111,923 (1,027,881 ) 599,561 Less: Comprehensive income attributable to noncontrolling interests — — (6,953 ) (54,669 ) — (61,622 ) Comprehensive income (loss) attributable to MGM Resorts International $ 537,939 $ 1,035,905 $ (65,278 ) $ 57,254 $ (1,027,881 ) $ 537,939 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION Six Months Ended June 30, 2016 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Cash flows from operating activities Net cash provided by (used in) operating activities $ (390,377 ) $ 738,453 $ 62,313 $ 203,257 $ — $ 613,646 Cash flows from investing activities Capital expenditures, net of construction payable — (23,912 ) (138,987 ) (807,672 ) — (970,571 ) Dispositions of property and equipment — 1,295 — 364 — 1,659 Investments in and advances to unconsolidated affiliates — (1,555 ) — — — (1,555 ) Distributions from unconsolidated affiliates in excess of cumulative earnings — 543,437 — — — 543,437 Intercompany accounts — (1,026,829 ) — — 1,026,829 — Other — (3,986 ) — (1,210 ) — (5,196 ) Net cash provided by (used in) investing activities — (511,550 ) (138,987 ) (808,518 ) 1,026,829 (432,226 ) Cash flows from financing activities Net borrowings (repayments) under bank credit facilities - maturities of 90 days or less (3,861,375 ) 3,550,000 (1,858,375 ) 453,064 — (1,716,686 ) Borrowings under bank credit facilities - maturities longer than 90 days 1,845,375 — — — — 1,845,375 Issuance of long-term debt — — 1,050,000 — — 1,050,000 Retirement of senior notes (1,496,187 ) (2,661 ) — — — (1,498,848 ) Debt issuance costs (20,974 ) (1,530 ) (68,207 ) (32,550 ) — (123,261 ) Issuance of MGM Growth Properties common stock in public offering — — 1,207,500 — — 1,207,500 MGM Growth Properties common stock issuance costs — — (75,032 ) — — (75,032 ) Excess tax benefit from exercise of stock options 3,812 — — — — 3,812 Intercompany accounts 4,514,805 (3,819,728 ) 158,822 172,930 (1,026,829 ) — Distributions to noncontrolling interest owners — — — (32,798 ) — (32,798 ) Other (7,415 ) (3 ) — — — (7,418 ) Net cash provided by (used in) financing activities 978,041 (273,922 ) 414,708 560,646 (1,026,829 ) 652,644 Effect of exchange rate on cash — — — (1,121 ) — (1,121 ) Cash and cash equivalents Net increase (decrease) for the period 587,664 (47,019 ) 338,034 (45,736 ) — 832,943 Balance, beginning of period 538,856 304,168 — 827,288 — 1,670,312 Balance, end of period $ 1,126,520 $ 257,149 $ 338,034 $ 781,552 $ — $ 2,503,255 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION Three Months Ended June 30, 2015 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Net revenues $ — $ 1,687,721 $ — $ 698,125 $ (711 ) $ 2,385,135 Equity in subsidiaries' earnings 300,435 47,659 — — (348,094 ) — Expenses Casino and hotel operations 1,506 994,001 — 461,001 (711 ) 1,455,797 General and administrative 1,039 266,470 15,348 50,851 — 333,708 Corporate expense 20,577 39,066 — (41 ) — 59,602 Preopening and start-up expenses — 1,326 — 16,563 — 17,889 Property transactions, net — 3,456 — 497 — 3,953 Depreciation and amortization — 89,890 46,190 72,485 — 208,565 23,122 1,394,209 61,538 601,356 (711 ) 2,079,514 Income (loss) from unconsolidated affiliates — 43,481 — (581 ) — 42,900 Operating income (loss) 277,313 384,652 (61,538 ) 96,188 (348,094 ) 348,521 Interest expense, net of amounts capitalized (196,573 ) (263 ) — (6,409 ) — (203,245 ) Other, net 9,545 (18,414 ) — (13,712 ) — (22,581 ) Income (loss) before income taxes 90,285 365,975 (61,538 ) 76,067 (348,094 ) 122,695 Benefit (provision) for income taxes 7,174 (2,811 ) — (591 ) — 3,772 Net income (loss) 97,459 363,164 (61,538 ) 75,476 (348,094 ) 126,467 Less: Net income attributable to noncontrolling interests — — — (29,008 ) — (29,008 ) Net income (loss) attributable to MGM Resorts International $ 97,459 $ 363,164 $ (61,538 ) $ 46,468 $ (348,094 ) $ 97,459 Net income (loss) $ 97,459 $ 363,164 $ (61,538 ) $ 75,476 $ (348,094 ) $ 126,467 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment 311 311 — 608 (622 ) 608 Other comprehensive income (loss) 311 311 — 608 (622 ) 608 Comprehensive income (loss) 97,770 363,475 (61,538 ) 76,084 (348,716 ) 127,075 Less: Comprehensive income attributable to noncontrolling interests — — — (29,305 ) — (29,305 ) Comprehensive income (loss) attributable to MGM Resorts International $ 97,770 $ 363,475 $ (61,538 ) $ 46,779 $ (348,716 ) $ 97,770 Six Months Ended June 30, 2015 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Net revenues $ — $ 3,257,003 $ — $ 1,461,810 $ (1,434 ) $ 4,717,379 Equity in subsidiaries' earnings 628,201 92,625 — — (720,826 ) — Expenses Casino and hotel operations 3,006 1,931,440 — 974,905 (1,434 ) 2,907,917 General and administrative 2,240 525,467 30,674 103,500 — 661,881 Corporate expense 36,093 74,270 — (405 ) — 109,958 Preopening and start-up expenses — 2,243 — 31,517 — 33,760 Property transactions, net — 4,713 — 829 — 5,542 Depreciation and amortization — 176,122 91,617 147,238 — 414,977 41,339 2,714,255 122,291 1,257,584 (1,434 ) 4,134,035 Income (loss) from unconsolidated affiliates — 160,746 — (465 ) — 160,281 Operating income (loss) 586,862 796,119 (122,291 ) 203,761 (720,826 ) 743,625 Interest expense, net of amounts capitalized (407,650 ) (551 ) — (11,306 ) — (419,507 ) Other, net 22,424 (39,152 ) — (28,354 ) — (45,082 ) Income (loss) before income taxes 201,636 756,416 (122,291 ) 164,101 (720,826 ) 279,036 Benefit (provision) for income taxes 65,673 (4,497 ) — (1,099 ) — 60,077 Net income (loss) 267,309 751,919 (122,291 ) 163,002 (720,826 ) 339,113 Less: Net income attributable to noncontrolling interests — — — (71,804 ) — (71,804 ) Net income (loss) attributable to MGM Resorts International $ 267,309 $ 751,919 $ (122,291 ) $ 91,198 $ (720,826 ) $ 267,309 Net income (loss) $ 267,309 $ 751,919 $ (122,291 ) $ 163,002 $ (720,826 ) $ 339,113 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment 1,572 1,572 — 3,084 (3,144 ) 3,084 Other (672 ) (672 ) — — 672 (672 ) Other comprehensive income (loss) 900 900 — 3,084 (2,472 ) 2,412 Comprehensive income (loss) 268,209 752,819 (122,291 ) 166,086 (723,298 ) 341,525 Less: Comprehensive income attributable to noncontrolling interests — — — (73,316 ) — (73,316 ) Comprehensive income (loss) attributable to MGM Resorts International $ 268,209 $ 752,819 $ (122,291 ) $ 92,770 $ (723,298 ) $ 268,209 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION Six Months Ended June 30, 2015 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Cash flows from operating activities Net cash provided by (used in) operating activities $ (400,538 ) $ 693,411 $ (30,674 ) $ 185,070 $ — $ 447,269 Cash flows from investing activities Capital expenditures, net of construction payable — (190,008 ) (14,779 ) (389,254 ) — (594,041 ) Dispositions of property and equipment — 182 — 77 — 259 Proceeds from sale of assets held for sale — 19,797 — — — 19,797 Investments in and advances to unconsolidated affiliates (141,230 ) (35,449 ) — — — (176,679 ) Distributions from unconsolidated affiliates in excess of cumulative earnings — 202,136 — — — 202,136 Investments in cash deposits - original maturities longer than 90 days (200,205 ) — — — — (200,205 ) Proceeds from cash deposits - original maturities longer than 90 days 570,000 — — — — 570,000 Intercompany accounts — (674,807 ) — — 674,807 — Other — (3,744 ) — 5,598 — 1,854 Net cash provided by (used in) investing activities 228,565 (681,893 ) (14,779 ) (383,579 ) 674,807 (176,879 ) Cash flows from financing activities Net borrowings (repayments) under bank credit facilities - maturities of 90 days or less (1,270,250 ) — — 223,742 — (1,046,508 ) Borrowings under bank credit facilities - maturities longer than 90 days 2,516,875 — — 900,000 — 3,416,875 Repayments under bank credit facilities - maturities longer than 90 days (1,260,625 ) — — (450,000 ) — (1,710,625 ) Retirement of senior notes (504 ) — — — — (504 ) Debt issuance costs — — — (45,639 ) — (45,639 ) Intercompany accounts 841,658 (24,490 ) 45,453 (187,814 ) (674,807 ) — Distributions to noncontrolling interest owners — — — (264,454 ) — (264,454 ) Excess tax benefit from exercise of stock options 208 — — — — 208 Proceeds from issuance of redeemable noncontrolling interest — — — 5,000 — 5,000 Other (494 ) (3 ) — 3 — (494 ) Net cash provided by (used in) financing activities 826,868 (24,493 ) 45,453 180,838 (674,807 ) 353,859 Effect of exchange rate on cash — — — 714 — 714 Cash and cash equivalents Net increase (decrease) for the period 654,895 (12,975 ) — (16,957 ) — 624,963 Change in cash related to assets held for sale — 3,662 — — — 3,662 Balance, beginning of period 799,508 255,655 — 658,552 — 1,713,715 Balance, end of period $ 1,454,403 $ 246,342 $ — $ 641,595 $ — $ 2,342,340 |